Thursday, 22 April 2010

There seems to be a lot of confusion about Ayn Rand’s position on intellectual property both by her supporters and her detractors. For instance, the Cato Institute considers it almost a prerequisite to have read Atlas Shrugged to work there. However their position on patents and copyrights is in direct contradiction to Ayn Rand’s position.

The following quote from Atlas Shrugged should give you a hint at Ayn Rand’s position on intellectual property:

“Man’s mind is his basic tool of survival. Life is given to him, survival is not. His body is given to him, its sustenance is not. His mind is given to him, its content is not. To remain alive he must act and before he can act he must know the nature and purpose of his action. He cannot obtain his food without knowledge of food and of the way to obtain it. He cannot dig a ditch––or build a cyclotron––without a knowledge of his aim and the means to achieve it. To remain alive, he must think.”
- Rand 1992, p. 1012.

Ayn Rand devotes a whole chapter, Chapter 11, in Capitalism: The Unknown Ideal to patents and copyrights. The first sentence makes her position crystal clear. “Patents and copyrights are the legal implementation of the base of all property rights: a man’s right to the product of his mind.”[1] “What the patent and copyright laws acknowledge is the paramount role of mental effort in the production of material values: these laws protect the mind’s contribution in its purest form: the origination of an idea.”[2]

After pointing out that intellectual property is the source of all property rights, she clarifies the distinction between the idea and the physical embodiment. “What the patent or copyright protects is not the physical object as such, but the idea that embodies it. By forbidding an unauthorized reproduction of the object, the law declares, in effect, that the physical labor of copying is not the source of the object’s value, that the value is created by the originator of the idea.”[3] “Thus the law establishes the property right of the mind to that which it has brought into existence.”[4] She then points out that “patents and copyrights only pertain to the practical application of knowledge, to the creation of a specific object which did not exist in nature.”[5]

Next, she tackles the whole question of whether a patent is privilege (in the modern sense of a gift)[6] or is a right. According to Rand, the government does not grant a patent, in the sense of a gift, privilege or favor, but recognizes the originator of the idea and protects their rights in the idea.[7]

Rand has a very interesting take on the reason for limited terms of patents and copyrights. She analogies a patent or copyright to a debt owed to the inventor/author by people that copy the inventor’s invention or author’s book. Debts are not and cannot be perpetual, so this is why the term of patents and copyrights are limited according to Rand. I will note that real property rights are actually time limited also. A person only has a property right in real (personal) property during their lifetime. How can someone who is not alive own something – this would be a logical absurdity. However, real property is passed on to the person with the next best title to real property upon a person’s death. In the case of intellectual property, no one person has better title to intellectual property than anyone else so upon the expiration of its term it becomes free for all mankind to use. Or as Rand explains, real property “can be left to heirs, but it cannot remain in their effortless possession in perpetuity: the heirs can consume it or must earn its continued possession by their own productive effort.”[8] In contrast, “Intellectual property cannot be consumed. If it were held in perpetuity, it would lead to the opposite of the very principle on which it is based: it would lead, not to the earned reward of achievement, but to the unearned support of parasitism.”[9]

Rand seems to anticipate the patent thicket discussion and suggests that this is the reason for shorter terms of patents than copyrights.[10] She also suggests that it is very difficult to correctly define the limits of a patent boundary.[11] Here, she is mistaken. There is no evidence of a patent thicket ever existing on a macroeconomic level, only evidence of people who do not want to compensate an inventor for using their technology. The boundaries of patents are no more difficult to define than those of copyrights or land before GPS and title insurance. However, patents will be more useful as the equivalent of title insurance for invention is created.

I will end this post with a particularly prescient quote from Rand:

Today, patents are the special target of the collectivists’ attacks . . .[12]

I'm with you Graeme, black and white, it's why medical companies invest in drugs that give you an erection rather than a cure for AIDS, at least with vitamin V they can keep a hold on their product. Come up with a cure for HIV/AIDS and be prepared to be ripped off for the 'greater good'.

I previously mentioned the Watt/Boulton patents, and that they delayed the Industrial Revolution by stymieing innovation, because the argument that patents encourage innovation is flawed (at best). Since the Industrial Revolution has been claimed as a supposed result of patent recognition (which it certainly wasn't) I raised what actually did occur.

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I'm not convinced the case for IP as property has been properly addressed yet. There is the possibility that it may not be able to be accomplished. That would be a problem, but one that may need to be accommodated.

On the other hand, if the case can be made and proved, that immediately leads to the requirement to develop a practical implementation of a means of claiming and defending said material (IP). Arbitrary term limits, tests and rules would need to be discarded. Objective formulations (with reasons and validations) would be required for each aspect of an IP system.

No-one should be surprised or unhappy about that. It's the nature of philosophy (and pretty much any other human endeavour for that matter). Humans are not omniscient. There is always more to discover and learn and do and achieve.

The erection drugs you refer to were originally developed for control of hypertension. As it happens a happy side effect relates to erectile function. The research required to pursue that application was modest. Passing the FDA approvals process was a different matter.

A cure for HIV/AIDS would be primarily protected in the West by the FDA. Generics and copies would come under severe controls and likely would not be legally available in the West.

I think a large part of the "problem" with IP is that it can be held by non natural entities.

Reduced, as Rand does, to the argument of whether "A man" has the right over "his" work, all the property right arguments makes sense.

But taking it to say, a collective has the rights of the works of all individuals inside that collective, that's where it breaks down, even if that collective is a company.

What I'm saying is this: Either IP right's can only be held by natural persons, or we need to rethink contracts regarding the transfer of these rights to the collective. (a simple contract like: All your ideas belong to us, is failing us)

@LGM: You should realise that the "history" you cite about the Watt/Boulton patents, specifically "that they delayed the Industrial Revolution by stymieing innovation" is not supported by any standard histories, but only by the Mises Institute's pseudo-historians. As I've said before to you, don't believe everything you read over there.

@LGM: And just as importantly (following Bastiat's principle of 'What is Seen and Not Seen') you should ask yourself if (without the ability to have his invention protected by patent law) Watt would even have bothered to invent the condender that everyone else eventually copied, or whether Boulton would have even contmplated investing in the invention.

It happened. Read Hansard! Should you be seriously interested you can request primary material from the IMechE, the British Library, the Science Museum, etc. When I studied IP Law this history was one of those very interesting examples we were expected to study and know.

Standard histories indeed! Is Objectivism a crock because none of the standard philosophies support it? Risable.

For goodness sake, quit smearing.

Either you have access to the facts (good or bad) or you do not. If the facts don't support your case, then check your premise and deal with reality.

You provided some dubious justifications for IP protection in your earlier essay. Now you know.

Anyway, to make the case for IP as property does not require the argument "patents etc. promote innovation" be correct. That's a different matter entirely.

@LGM: Let me say it again: Don't believe everything you read over there at the Mises Insitute, especially not its histories.

I suspect your non-historians have confused correlation with causality. Have you considered for example that the new industries that eventually utilised the steam engine took some time to realise its importance and to develop the necessary capital? (This was, you wil remember, the beginning

of the period in history in which vast capital was just starting to be created) Or, more importantly that the "delay" in the onset of the Industrial Revolution was not any putative problems others had with Messrs Boulton & Watt, but the very real economic and physical destruction of the Napoleonic Wars, whch lasted for over two decades. That, at least, is the conclusion of real historians who look at the whole context rather than just a patial one.

For example, on the former point, Melvin Kranzberg, "one of the greatest historians of technology": "Capital for investment in machinery is necessary for industrialization. In addition to the cost of the machinery itself, there is also the expense of bridging the gap between invention and innovation, that is, the development of a basic idea into a usable process or piece of machinery. Many inventions would have been stillborn had not capital been found to make their application effective. For example, the industrial application of Watt's fundamental invention of the steam engine was delayed for almost two decades until Matthew Boulton provided the capital and the drive which made the steam engine commercially successful."

On the latter point, I'd suggest any standard history of the Industrial Revolution. There's nothing controversial about it.

And of course, in the period the Mises Institute's alleged historians cite, nothing stopped manufacturers and entrepreneurs from using the inferior Newcomen engine....

That's very likely it, in a nutshell. There is always a delay between discovering something great, and exploiting its potential in a commercial application. How long it takes is dependent on numerous complex variables.

But that aside, even if LGM could prove his point, it wouldn't matter a wot to this issue. As PC has said, why would anyone invent anything at all in the first place, if your rights weren't going to be protected?

The issue is much broader than whether the Industrial Revolution could have happened a few years earlier or not. Knowing that your ideas and inventions belong to you, and will be protected, is a necessary pre-requisite for innovation and invention to thrive in the first place.

Take away that, and you take away the possibility of an Industrial Revolution, period.

"Rand has a very interesting take on the reason for limited terms of patents and copyrights. She analogies a patent or copyright to a debt owed to the inventor/author by people that copy the inventor’s invention or author’s book. Debts are not and cannot be perpetual, so this is why the term of patents and copyrights are limited according to Rand. "

That is the worst example of logic I have ever seen:

1. RAND analogies a patent or copyright to a debt

2. Debts are not and cannot be perpetual,

3. Rights cannot be perpetual

Did anyone miss the part of that analysis where PC magically turned a right (without a time limit) into a debt (with a time limit)?

I cannot. PC simply said that because Rand used debt as an analogy that somehow turn the right into a debt.

Um....no.

Rand was simply showing how SHE saw the right as being less than a 100% full right to the owner. She never considered the Intellectual property right as the same as real property since she never said you have ti give away your car after 20 years did she?

There is a missing step in the logic because nowhere did PC show the actual reason why IP should have a limited time period.

Having just read Atlas Shrugged a few months ago, and being part of a community that makes their living from intellectual property ( http://www.royaltyfreemusiclibrary.com ), I am a huge fan of Rand's ideology. She has it right.

Let me copy and paste for you what I wrote (saves typing the same material AGAIN). Perhaps you didn't see it last time.

"Read Hansard! Should you be seriously interested you can request primary material from the IMechE, the British Library, the Science Museum, etc."

Those are where I got the photocopies of some of my primary source material from (also the UTS library in Sydney, various patent databases and also from correspondence with professional colleagues/attornies- and before you start frothing, Stephan Kinsella was not among them). My understanding was that those institutions, libraries and organisations were not part of the the Von Mises Institute or even related to it. Has their status changed?

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The Watt/Boulton patents, how they were obtained, prosecuted and defended is no secret. They were controversial at the time (big debates in the House, lots of lobbying and backroom negotiation). The patents operated exactly as intended and a monopoly came into being. They persisted for decades and prevented the commercialisation of superior designs to Watt's.

It is pertinent to understand a little of the shortcomings of the Newcomen engine. It is a low power, low efficiency engine which is difficult to operate, difficult to maintain, has high fuel consumption and low cyclic rate. These and other technical reasons (related to such as power density, reliability, drive mechanism, PTO, low mean effective pressure, etc.) severely limited its applicability. THAT (the performance issue) was what severely restricted its use by entrepeneurs & manufacturers. In short, for them, it wouldn't perform well enough for the work. They couldn't use it.

You ask, "Have you considered for example that the new industries that eventually utilised the steam engine took some time to realise its importance and to develop the necessary capital?"

Yes.

Had you considered that during the decades the Watt/Boulton patents were in force (enough time to realise the importance of steam prime movers) there was more than enough capital available to finance several competing engine types, each aimed at addressing the requirements of certain applications the inventors wanted to exploit? The demand for steam power was certainly existant. Manufacturers and entrepeneurs were not slow to appreciate the possibilities. Indeed, some of them had plans and the necessary capital for machinery which had to wait until they could obtain a suitable prime mover. The existence of the W/B patents prevented most of those from being reduced to practice (Watt's engine design also had limitations which prohibited it from universal applicability, these were not addressed until right after the W/B patents were not re-awarded).

Watt/Boulton delayed the introduction of innovation in the their art and related art by aggressively excluding all new entrants through exhaustive use of the legal system. This delayed the Industrial Revolution by some 30 years. Fact.

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The notion that IP protection fosters innovation is flawed. It is not a valid argument to hoist in defense of IP, as you are well aware. To make the case for IP requires a different approach.

The issue is much broader than whether the Industrial Revolution could have happened a few years earlier or not. Knowing that your ideas and inventions belong to you, and will be protected, is a necessary pre-requisite for innovation and invention to thrive in the first place.

Absolutely. But nobody's suggesting not protecting property rights. On the contrary, we want to strengthen property rights by getting rid of additional legislative (fake) "rights" which infringe property rights!

There is a missing step in the logic because nowhere did PC show the actual reason why IP should have a limited time period.

PC is Randian. To them, "Rand said" is like "God said" to a religious fundamentalist (but perhaps more powerful). So, yes, he showed a reason, in much the same way religious fundamentalists show reasons why the earth is 6000 years old and evolution is impossible; but it's not a reason that means anything to non-fundies...